In November 2010, the Science and Technology Select Committee of the House of Commons (the lower chamber of the UK Parliament) announced an inquiry into the importance of strategic metals to the UK. The Chair of the Committee, Andrew Miller MP, said

“This inquiry has the potential to be wide-ranging, from concerns about the availability of rare earth elements to how metals are recycled from discarded technological devices, some unfortunately through the use of exploited child labour in developing countries.”

The impetus for the inquiry was the growing speculation in the UK and elsewhere, concerning the future availability of strategically important metals, including rare earths. The Committee sort to answer five key questions:

1. Is there a global shortfall in the supply and availability of strategically important metals essential to the production of advanced technology in the UK?
2. How vulnerable is the UK to a potential decline or restriction in the supply of strategically important metals? What should the Government be doing to safeguard against this and to ensure supplies are produced ethically?
3. How desirable, easy and cost-effective is it to recover and recycle metals from discarded products? How can this be encouraged? Where recycling currently takes place, what arrangements need to be in place to ensure it is done cost-effectively, safely and ethically?
4. Are there substitutes for those metals that are in decline in technological products manufactured in the UK? How can these substitutes be more widely applied?
5. What opportunities are there to work internationally on the challenge of recovering, recycling and substituting strategically important metals?

Written submissions in response to these questions were received by the Committee and published earlier this month. Evidence was received from a variety of sources, including professional societies, universities, government agencies and companies (including TMR).

Earlier today, the Committee completed a first round of hearings at Portcullis House in London. Witnesses included:

• Louis Brimacombe – Tata Steel
• Tony Hartwell – Environmental Sustainability Knowledge Transfer Network
• Ian Hetherington – British Metals Recycling Association
• Professor David Manning – Geological Society of London
• Dr Mike Pitts – Royal Society of Chemistry
• Dr Bernie Rickinson – Institute of Materials, Minerals and Mining
• Sophie Thomas – The Design Council

The hearings lasted for two hours, and were conducted in two parts. You can see complete coverage of the event here (if you have any problems running this video – visit the UK Parliament archive page instead):

A transcript of the hearings will likely be available shortly, and once published we’ll add a link to them here.

A few very quick ‘takeaways’ from the hearings:

• There was general consensus that the European Community Directive on Waste Electrical and Electronic Equipment (WEEE), which currently requires that consumer goods manufacturers take responsibility for the disposal of devices at the end of their useful lives, should be expanded to cover industrial and commercial goods and appliances too.

• Product designers need to work with materials scientists and engineers to design hi-tech products that can be easily dismantled, to enable rare-metal-rich components to be recovered, re-used or recycled.

• In the few cases were product components are recovered, the processes used to dismantle and to acquire these components from the waste stream, are far less sophisticated than the processes used to create the products in the first place.

• Product designers need incentives to design their products with recovery and reusability in mind.

• Local expertise in materials science and engineering is required wherever manufacturing is going to occur, in order to support the supply chain properly.

• Much of the work in Europe on product end-of-life issues has focused almost entirely on environmental issues; more work needs to be done to expand the discussion to sustainability and economic considerations – and the social value of all such activities.

• When discussing where rare-earth projects were underway outside of the UK, no-one on the panel of witnesses or committee of MPs, appeared to be aware of the advanced rare-earth projects currently underway in Europe – specifically Sweden (and Greenland, if you consider it to be part of Europe). This was despite at least one written submission giving details on such projects (that from TMR!).

• One witness said that in his research prior to coming to the hearings, he had tried to ascertain what  the market might be for recycled rare earths such as neodymium, but was unable to find any information on this. He then commented that without such markets, there was no incentive to recycle rare earths, or other materials. I’m not sure that I’d agree with this. If one assumes a reasonable level of purity in any such recycled materials, then the material is surely fungible i.e. is no different from “primary” neodymium-based materials.

• The general consensus was that the answers to the questions originally posed by the Committee, had to be answered in the wider European context at least, since these were issues that went way beyond the UK’s borders, and since very few strategic metals are actually mined or produced in the UK.

We’ll keep an eye on any further developments on this story, and update you as and when we can.

By Mike Alberti – Remapping Debate – Published: January 11, 2011

While the recent controversy surrounding China’s almost complete control over rare earth elements may seem to some like an arcane debate over minerals with hard-to-pronounce names, for many experts and economists it represents a concrete example of a broader long-term failure of United States trade and industrial policy.

Rare earth elements are a set of 17 minerals, some of which are crucial to producing a wide array of high-tech products. They are used in iPads and in flat screen TVs, in wind turbines and in hybrid electric car batteries. These minerals are also needed for the tracking systems of missiles and military drones. Until about 1984, the U.S. mined the majority of the world’s rare earth supply; today it produces almost none. Nearly all of the mining now occurs in China.

From the mid-60’s to the mid-80’s, global rare earth mining was dominated by the Mountain Pass mine in California. The mine closed in 2002, after a series of radioactive wastewater leaks raised environmental concerns, and after increased Chinese production — partially due to state intervention and partially due to a lack of environmental controls — had begun to undercut U.S. prices.

Meanwhile, U.S. manufacturers that relied on rare earths found it easier to be closer to the source, and also relocated. In 2004, a company called Magnequench — a huge producer of permanent magnets that require rare earths and that are crucial components in the guidance systems of cruise missiles — closed its plant in Indiana and moved its facilities to China.

Read the rest of this article….

By Rob Spiegel & Suzanne Defree – EDN – Published: December 2, 2010

China has started to severely restrict the exports of rare-earth materials, which often find use in “green”-technology designs, including hybrid vehicles and energy-efficient lighting, as well as in the medical, defense, and consumer markets. The country delivers nearly 100% of the world’s rare-earth materials: 17 metals that are somewhat hard to refine and that tend to occur in the same ore deposits. The cutbacks have resulted in shock waves through the electronics industry and could force design changes in the near future.

China set out on a moderate restriction path this year and then announced in July that it would cut exports by 72% for the remainder of 2010. It plans an overall export reduction of 30% for next year.

These cutbacks have increased the price of rare-earth materials an average of 700%, prompting legislation, which is currently stalled, to restart US rare-earth-materials production. The Western Hemisphere’s one rare-earth-materials producer, Colorado-based Molycorp Minerals, issued an initial public offering of stock in July, raising $390 million to restart its California mine and ramp up processing to counter world shortages.

Part of China’s motivation for reducing rare-earth-materials exports is its desire to emphasize its industrial status. China’s leaders want to move away from raw-materials exports and evolve toward exporting more finished goods.

Production of rare-earth materials fell off worldwide beginning in the 1980s when low prices in China made production unfeasible elsewhere in the world. Tom Valiere, senior vice president and co-founder of Design Chain Associates, says this cutback is a wake-up call for US industry. “We used to lead the world in the export of rare-earth materials,” he says. “In the last 20 years, we’ve become dependent. The whole thing flew under the radar until green technology placed demand on rare-earth materials and we realized they were sole-sourced to China.”

China’s restrictions this year have been part of a multiyear plan to save most of its supply for its own industry. “Each year, China has brought down its exports by X% and never exceeded its quotas,” says Gareth Hatch, co-founder of Technology Metals Research. “The reduction the country made in July was a huge reduction over the first half of the year.”

Worldwide shortages are now occurring. “The world outside China uses a collective 50,000 tons annually,” says Jim Simms, director of public affairs at Molycorp Minerals. “[China] reduced its exporting in 2010 to about 30,000 tons. Since China supplies about 97% of rare-earth materials, the world has to depend on what China exports.”

Simms believes that the demand for the materials will just increase over the coming years. The company expects to produce 20,000 tons by the end of 2012. “My BlackBerry only has about 3/10g of rare-earth materials,” he says, but “a single wind turbine requires about one ton. A car can use about 25 kg.”

Lynas Corp, a rare-earth-materials supply company in Australia, expects to increase rare earths delivery in 2011 to 11,000 tons per year.

Rare-earth materials facts

Rare-earth materials include terbium, which finds use in flat-panel TVs and high-efficiency fluorescent lamps, and neodymium, key to the permanent magnets in high-efficiency electric motors. Rare-earth materials are not indeed rare. The series of nonferrous metals is common in the environment. According to Design Chain Associates, most rare-earth materials are as common as copper, and even the rarest is more common than gold.

Part of the market pressure on rare-earth materials comes from new demand that green technologies has prompted. The market, including electric- and hybrid-vehicle motors and wind turbines, requires magnets.

Legislation stalls

Over the summer, the House of Representatives passed HR 6160, RESTART (Rare Earths and Critical Materials Revitalization Act of 2010). The bill authorizes development of a domestic rare-earth-materials program aiming at addressing short-term shortages. Industry organizations continue to push for legislation such as RESTART to speed the output of rare-earth materials. “We discussed the rare-earth situation with government committees, and they’re concerned about it,” says Fern Abrams, director of government relations and environmental policy at IPC (formerly, Interconnecting and Packaging Electronic Circuits).

IPC has taken a stand encouraging legislation to rekindle the rare-materials production in the United States. “We’re asking our members to write to their representatives asking that they assist US efforts to re-establish mining in the United States,” says Ron Chamrin, manager of government relations at IPC. “There are bills in Congress, as well as activity in the Department of Energy. It’s not a panic, but the government should be concerned and take action.”

A US Government Accountability Office report claims that China’s dominance in rare-earth materials’ mining and refining has implications for global availability and pricing and could also jeopardize US defense readiness.

Meanwhile, China’s export restriction of rare-earth materials has hit Japan the hardest, especially for its production of high-efficiency electric motors in electric and hybrid vehicles. China placed further export restrictions on Japan last month over Japan’s detention of a Chinese fishing-trawler captain. In anticipation of rare-earth-materials shortages, Nidec Corp, a maker of electric cars, has developed a process to build switched-reluctance motors without rare-earth materials. The company will begin making the motors without the materials in 2012.

HALIFAX, NOVA SCOTIA, Oct 07, 2010 (MARKETWIRE via COMTEX) — Ucore Rare Metals Inc. (“Ucore” or the “Company”) is pleased to comment on the bipartisan passage of H.R. 6160, the Rare Earths and Critical Materials Revitalization Act of 2010 (“the Act”), by the U.S. House of Representatives. The Act incorporates amendments to the National Materials and Minerals Policy, Research and Development Act of 1980 and other proposals to further the establishment of a domestic supply chain for rare earths in the United States.

The Act calls for a program of research, development, and commercial application to assure the long-term secure and sustainable supply of rare earth materials sufficient to satisfy the national security, economic well-being, and industrial production needs of the United States. The program will be designed to support activities from the exploration and discovery of rare earth materials through to the development of new or improved processes and technologies utilized in the industry.

Additionally, the Act calls for a Temporary Program for Rare Earth Materials Revitalization, authorizing the Secretary of Energy to make loan guarantees for projects including the separation and recovery of rare earth materials from ore or other sources and further downstream processing, including the preparation of oxides, metals, alloys or other forms of the materials needed for national security, economic well-being or industrial production purposes. The Act contemplates cooperation between public and private sector participants to achieve a complete rare earth materials production capability in the United States within 5 years of enactment of the Act.

“The passage of this Act by the House further demonstrates policy makers’ commitment to the re-establishment of a US domestic supply chain for rare earth materials,” said Jim McKenzie, President and CEO of Ucore. “We’ve recently seen China’s willingness to use their near monopoly on the supply of rare earth products as a diplomatic tool, which underscores the necessity for cooperation between private and public sectors in the U.S. to assure a stable supply of these materials which are so crucial to domestic security and economic well-being. The five year timeframe contemplated by the legislation reflects the urgency of the situation and the necessity of securing this supply in the near term. As Ucore transitions from exploration to mine scoping and development activities in 2011, the advantage of prospective financial guarantees and expediting assistance from Federal agencies can’t be overstated.”

Further legislation with respect to the supply of rare earth materials is also making its way through the legislative process. The Rare Earths Supply-Chain Technology and Resource Transformation Act of 2010, or ‘RESTART Act’ is currently being considered by the Subcommittee on Trade.

The RESTART Act, recently amended by Senator Murkowski of Alaska (R), incorporates a number of proposals, including the creation of an interagency working group consisting of representatives appointed by the Secretaries of Commerce, Defense, Energy, Interior, and State, as well as representatives from United States Trade and the Office of Science and Technology for the purposes of reestablishing a competitive domestic rare earth supply chain. The RESTART Act also calls for the provision of loan guarantees to rare earth industry participants, as well as the stockpiling of rare earth materials on an interim basis. Under this measure, the Administrator of the stockpile would be authorized to purchase necessary rare earth materials from China for a period of 5 years.

The RESTART Act further calls for a prioritization of Defense Production Act projects which address the domestic rare earth supply chain. Under the proposed legislation, within 180 days of the enactment, the Secretary of Defense will be required to issue a report describing past, current and future Defense Production Act projects to address the domestic rare earth supply chain, or to justify the lack thereof.

Within 90 days after the enactment of the RESTART Act, the Secretaries of Commerce, Interior, State, Defense and Energy will be called upon to issue guidance to rare earth industry related to obtaining loan guarantees under a number of available programs.

“While these Acts together promise to give U.S.-based rare earth producers a remarkable edge in the race to replace specialty metals now dominated by China, very few domestic projects have the qualifications of Bokan as a strategic military and technological asset,” said Jack Lifton, a leading REE expert and a party to the initial drafting of proposed RESTART legislation. “As the largest historically documented Heavy rare earth deposit in the U.S., Bokan is a counterpoint to Molycorp’s primarily Light rare earth deposit at Mountain Pass in California. Together, these two deposits, located in relative proximity to each other and on U.S. soil, have the potential of liberating the U.S. from non domestic rare earth dependencies in the near term.”

by Alex Madrigal – The Atlantic – Published September 23, 2010

A dispute over a fishing boat collision took a strange turn yesterday when the New York Times reported that China had halted exports of rare earth elements to Japan.

Since the report, Chinese officials have disputed that any such ban is in place. Regardless of the facts or outcome of this particular situation, the bare fact remains: China has a virtual monopoly on the mining and production of the 17 rare earth elements and could stop shipments of the metals to any country at any time.

That would impact all kinds of products and processes from glassmaking to lightbulbs to batteries to wind turbine production. Even the American defense industry is dependent on rare earth elements from China, as a Government Accountability Office report found earlier this year.

The M1A2 Abrams tank has a navigation system that requires the elements. The Aegis Spy-1 radar needs them, too. Already, supply crunches have caused production delays in military technology, the GAO reported.

The wind and electric vehicle industries also require large amounts of rare earth elements, and fear a squeeze.

Given that two industries as diverse as green tech and defense both need rare earth metals, why is the United States so dependent on Chinese production? Is China just the only place we can get this stuff?

No. In California, there’s a place called Mountain Pass.

For decades, most of the world’s rare earth metals were mined and refined right there. The process of restarting production could begin at any time. The company that controls the pass, Molycorp, said it would take about $500 million to start mining again.

With that upfront investment, production hasn’t restarted. Chinese rare earth elements are just cheaper. But this is the sort of problem that you need to get started on long before a crisis. The GAO found it might take 15 years for the entire production chain to be back online.

This isn’t the sort of problem you can just throw money at and instantly fix, as rare earth elements industry analyst Jack Lifton noted this month.

“I don’t know what possesses politicians to think that they can simply invent intellectual capital. You can’t. It takes time. And once you fall behind in your specialty, you are behind. You have to catch up. It’s not a matter of reading the latest papers; you also have to go back to what happened between the latest papers, and when you knew how to do it,”

Lifton said.

“So I find the politicians and financial minds in America seem to have no knowledge whatsoever of manufacturing or mining. They just think that money solves all problems.”

Some Congressional representatives are trying to get a domestic industry going. There is a bill before the house, the Rare Earths Supply-Chain Technology and Resources Transformation Act of 2010 or the RESTART Act, that, if funded properly, could get an American rare earth metal industry going.

But, according to a spokesman for the bill’s sponsor, Mike Coffman, a Republican from Colorado, the bill hasn’t seen much movement since it was introduced in April of this year.

It could get a boost from a long-awaited Department of Defense report that is due out from the agency’s Industrial Policy wing in early October. It should examine the problem with far greater depth than the GAO report.

And the House Committee on Science and Technology passed a favorable judgment on a separate, more R&D focused bill this afternoon called the Rare Earths and Critical Materials Revitalization Act of 2010.

The point here is not to bash Chinese industrial policy. They need and want rare earth metals. They produce them on their soil. And they can do with them what they want. It’s not their policies but ours that are the problem.

Again, here’s Lifton summing up the issue:

“China doesn’t consider itself to be hoarding anything. They figure that they’re using their own materials for their own needs. They question why we insist on using words like “control” and “hoard,” because they ask, “If you needed the material, why shut your factories?”

So it’s as simple as that. We really are foolish in America. We’ve shut down an industry that’s strategic and critical, and all in the name of low cost. Now we’re surprised that the consequences that are obvious in doing this have now come back to bite us. I’m not surprised, and neither is anybody else in China.”

We could fix this problem. But unfortunately our politics works on the 15-minute timescale of fame, not the 15-year clock of industrial policy.

by Kira Kay – PBS Newshour / The Bureau for International Reporting – Original Air Date: June 14, 2010

Correspondent Kira Kay reports on a Canadian hunt for “rare earth” minerals, elements mined almost exclusively in China, that are key to emerging green technologies, cell phones, engines and other high-tech devices despite their short supply. Includes interview footage with Jack Lifton.

Sometimes things actually move pretty quickly in Washington. The FY2011 National Defense Authorization Act [NDAA] was passed on Friday by a vote of the US House of Representatives, with a comfortable margin. As reported earlier this week, the Act contains provisions pertaining to the rare earth supply chain, with a set of mandates directing the Department of Defense to take specific actions regarding the supply chain as a whole. Contained in Section 835, these provisions successfully made it through the process and are part of the final passed House version of the bill. The next step will be for the Senate to work on its own version of the NDAA, for the two items to then be amalgamated in conference, before being signed into law later this year.

Prior to the vote of the full House on the bill, Rep. Mike Coffman [R-CO] on behalf of himself and Rep. Brad Ellsworth [D-IN] proposed an Amendment to the bill, relating to neodymium-based [Nd-Fe-B] permanent magnets. The Amendment [#6 on the list] looked to add a new Section 839 to the bill, titled “Defense Industrial Base Priority For Rare Earth Neodymium Iron Boron Magnets”. The Amendment noted “an urgent need” to restore US-based capabilities for manufacturing sintered Nd-Fe-B magnets for defense applications and to eliminate the vulnerabilities in the US defense supply chain as they relate to these “key materials”. At present there are no manufacturers of sintered Nd-Fe-B magnets in the USA.

The Amendment mentioned the findings of the recent Government Accountability Office [GAO] report on rare earths. It further noted that the USA was technologically capable of restoring a Nd-Fe-B manufacturing capability, but that restoring such capability would take 3-5 years. Noting that worldwide supplies of rare earths “are expected to tighten significantly within the next 3-5 years” and that there is an appreciable time to get new parts qualified for defense programs, the Amendment noted that work “should begin immediately” on restoring Nd-Fe-B production capability “to avoid future weapon system delivery disruption”.

Having made these observations, the Amendment then required that:

Not later than 90 days after the date of the enactment of this Act, the Secretary shall submit to the Committees on Armed Services of the House of Representatives and the Senate a plan to establish a domestic source of sintered neodymium iron boron magnets for use in the defense supply chain.

The Amendment further clarified what constitutes a “domestic source” of Nd-Fe-B magnets by stating that:

For the purposes of subsection (b), the capability to manufacture sintered neodymium iron boron magnets includes the alloying, pressing, and sintering of magnet materials. It does not include manufacturing magnets from standard shapes or imported blocks of neodymium. The Secretary’s plan shall not allow the grinding or reprocessing of neodymium to be considered a `domestic source of sintered neodymium iron boron magnets’.

This latter comment relates to the practice of companies procuring blocks of Nd-Fe-B magnet material from China, Japan, Germany and elsewhere, and then grinding the blocks into a final shape in the USA, before magnetizing or assembling the blocks into magnetic devices.

Rep. Coffman’s Amendment was considered in concert with several other amendments ‘en bloc’, and this group of Amendments passed by a voice vote. Section 839 is therefore now a part of the final passed House version of the NDAA. I asked Jeff Green, the industry lobbyist who has been working diligently on the issue of rare earth supply chain vulnerability, what this says about the awareness of members of Congress of these issues. “There is clear bi-partisan agreement on this issue,” said Mr. Green, “as evidenced by the fact that both the Chairman and Ranking Member of the House Armed Services Committee moved to submit this and other Amendments en bloc”. It is clear that the combination of growing mainstream interest on rare earths, and events such as the March hearings in the House on rare earths, and the recent publication of the GAO report, have had an impact. “We are seeing some traction,” said Mr. Green, “on some key issues of importance to national security and defense”.

The combination of the language in Section 835 and 839 of the NDAA is pretty powerful, certainly as it related to the production of rare earth magnets in the USA. While I am not sure that it would actually take as long as 3-5 years to get Nd-Fe-B production up and running again [assuming that the appropriate capital investments were made], certainly at least a couple of years would be reasonably required to build and install equipment, to optimize processes and to get people trained. The larger headache is what to do about the creation of US or North American-based rare earth refining capabilities, the absence of which is a critical problem in the process of getting the supply chain back up and running. It remains to be seen how the Department of Defense will tackle this issue, if the language in the NDAA as it presently stands is eventually signed into law.

There is one other potential wrinkle in the Nd-Fe-B story; that of patent licensing. While the decline of North American Nd-Fe-B production was very much related to Chinese pricing issues, the restoration of such production for commercial purposes has in part been hampered by red tape associated with a suite of patents on Nd-Fe-B that Hitachi Metals of Japan presently holds. Originally owned by Sumitomo Special Metals, these patents have been licensed to specific companies over the years, some of whom did have production in the USA. However, indications are that Hitachi Metals is not keen to issue new licenses to companies in the USA for Nd-Fe-B production; this is likely to be one reason for the delay in the proposed rare earth magnet joint venture between Molycorp Minerals and Arnold Magnetic Technologies, announced last year.

Further complicating matters is the arcane legal status of some of these patents. While many of the original composition-related patents have since expired, many of the newer patents have not, with some of the more important ones not expiring until after 2014. However, some industry insiders are speculating, and not just privately, that there are fundamental flaws in the patents themselves and how they have been interpreted over the years, including the mis-translation from Japanese into English, of critical parts of the original patent claims.

All of this may, however, be moot, for defense-related Nd-Fe-B production in the USA at least, if it is formally determined that the production of Nd-Fe-B magnets in the USA, is in the national interest. It is a long-established legal convention that the US Government can legally take and make use of intellectual or other property for its own purposes, so long as appropriate compensation is given in return. Indeed, this is enshrined in the Fifth Amendment of the US Constitution which states, in part, that private property cannot be taken for “public use” without the provision of “just compensation”. So, in the event that the procurement of ‘home-grown’ Nd-Fe-B magnets by the Department of Defense is endangered by the patent situation, there is a fairly clear way out; simply taking the intellectual property associated with the magnetic material patents, and allowing manufacturers to use it to produce magnets, in return for ‘reasonable’ compensation to Hitachi Metals.

Of course, it’s unlikely that things will get to that point; a variety of interactions between Washington and Tokyo would no doubt take place before things escalated, in order to ‘encourage’ Hitachi Metals to ‘do the right thing’. Besides, with only a few years left on these patents, excessive intransigence hardly seems worth the effort…

First published at RareMetalBlog.

Yesterday CNN aired a short piece on rare earths, and growing concerns on their supply. The video can be viewed here:

Earlier this year, the release of the Government Accountability Office [GAO] report on rare earths garnered much attention, with its analysis of the vulnerabilities in the defense supply chain, particularly relating to to the geographic concentration of rare earth supply in China. Some may recall that this report was the result of language inserted into the National Defense Authorization Act [NDAA] for FY2010, which required that the head of the GAO, the Comptroller General, submit such a report to the Armed Services Committees in Congress. There was criticism of the report from a number of sources, primarily complaints that the report did little to move the issues of supply chain vulnerability forward.

Late last month, the Chairman of the House Armed Services Committee [HASC], Rep. Ike Skelton [D-MO], and the Committee’s Ranking Member, Rep. Buck McKeon [R-CA], introduced a proposed FY2011 version of the NDAA to the HASC. The bill was considered by the Committee and last week was recommended for consideration by the House as a whole, for a vote.

As was the case last year, language has been included in the proposed NDAA, relating to rare earths, and their role in the defense supply chain [language with which observers of the proposed RESTART Act will be familiar]. The language kicks things up a notch this time, with Section 835 of the Act requiring, if passed into law, that the Secretary of Defense be specifically tasked to:

undertake an assessment of the supply chain for rare earth materials and determine which, if any, rare earth materials are strategic materials and which rare earth materials are materials critical to national security.

The bill defines a “strategic material” as one which is “essential for military equipment”, is also “unique in the function it performs” and “for which there are no viable alternatives”. It also includes language that amends existing law to define “materials critical to national security” as those materials:

• which are needed for the production and maintenance of equipment used by the Armed Forces in military operations, AND

• whose supply could be restricted by actions outside of the control of the US Government.

The proposed legislation goes on to say that the Secretary of Defense may “consider the views of other Federal agencies, as appropriate”, likely a reference to the recent Request For Information published by the Department of Energy on rare earths, at the very least.

The bill goes on to state that:

any study conducted by the Director, Industrial Policy during fiscal year 2010 may be considered as partial fulfillment of the requirements of this section;

and that

any study conducted by the Comptroller General of the United States during fiscal year 2010 may be considered as partial fulfillment of the requirements of this section

The former comment here refers to a report on which the Department of Defense is presently working, which is due to be published in September 2010. The latter refers to the aforementioned GAO Report, published last month.

The bill specifically asks the Secretary of Defense to

consider the sources of rare earth materials (both in terms of source nations and number of vendors) including rare earth elements, rare earth metals, rare earth magnets, and other components containing rare earths.

The bill would require that, if the Department of Defense finds that one or more rare earths is indeed either strategic or critical in nature, a plan be developed to get the entire rare earths supply chain up and running in the USA again, and to eliminate any and all vulnerabilities in the supply chain, by the end of 2015. Areas for consideration in such a plan would include:

• the possibility of stockpiling of such materials
• the identification of problematic trade practices that could impede the supply chain
• an assessment of the climate for financing the revival of all aspects of the rare earths supply chain
• provision of R & D funding

The bill would give the Secretary of Defense six months from enactment, to report back to Congress on the findings of the assessment described earlier.

I asked Jeff Green, an industry lobbyist who worked with the US Magnet Materials Association on the recently proposed RESTART legislation, for his thoughts on the proposed language in the FY2011 NDAA.

“This will ensure that [the Department of Defense] does a complete assessment of the rare earth supply-chain,” said Mr. Green. “Congress is mandating an action plan rather than simply a status update.”

Despite prior efforts by Congress to provide mechanisms with which the Department of Defense could assess the criticality of certain materials in its supply chain, such as the creation of the Strategic Materials Protection Board [SMPB], there has apparently been little enthusiasm in the Department to use them. If this Act passes in its present form, or least without significant changes to the language described above, the Department would be required to take a number of concrete steps relating to the revival of the rare earths supply chain in the USA – IF it determines that such materials are either strategic or critical. If on the other hand the Department does not believe this to be the case [and this has been its position in the past, as evidenced by prior reports of the SMPB] then all bets are off.

We’ll continue to monitor progress with the legislation as it makes its way through Congress. In the meantime, you can see the current language in the legislation here.

First published at RareMetalBlog.

Yesterday, Rep. Mike Coffman [R-CO] sent a letter to his colleagues in the US House of Representatives, urging them to cosponsor House Resolution 4866, the Rare Earth Supply-Chain Technology and Resource Transformation (RESTART) Act of 2010, which he submitted to the House for consideration in March 2010.

The letter urged colleagues to co-sponsor the bill, which would

“[r]eestablish competitive domestic rare earths mineral production, processing, refining, purification, and metals production industries to support the growth of green job technology and manufacturing as well as the nation’s defense industry.”

Rep. Coffman went on to mention the recent Government Accountability Office [GAO] study on rare earth materials in the defense supply chain, which he requested be conducted last year, the results of which was released into the public domain last week. Rep. Coffman stated that

“The recent GAO Report on Rare Earth Metals in the Defense Supply Chain has highlighted the near term need for a sustainable supply chain on heavy rare earths in the U.S., both for critical American national defense and industrial applications.”

Generally, the more co-sponsors that a bill has, the greater are its chances that it will move through the various processes required for it to ultimately become law, either on its own or tucked into other legislation.

In addition to his “Dear Colleague” letter, earlier today Rep. Coffman sent a letter to leaders of the House Armed Services Committee, asking that hearings be scheduled in the near future to address the findings of the GAO study, and to give this committee time to gather information in order to “draw attention to this national security threat.”

We’ll try to keep you updated on the response of lawmakers to Rep. Coffman’s request for cosponsorship of the RESTART Act, and his request for new hearings on the rare earths supply chain.

[First published at RareMetalBlog.]